Fraud fighters must get in legislative game

Two truths will govern our success in getting strong state fraud laws onto the books: We must prepare our 2017 legislative agenda now; waiting until December or January is too late. Fraud fighters also can play a pivotal role in getting fraud bills on the front burner in many states.

We’re in an election year, with less than 90 days until we vote for a new president and Congress. We’ll also vote for quite a few state legislators, and a handful of governors.

We tend to be Washington-centric, thinking that who we put into the White House and Congress will affect us the most.

Actually, most of us are directly affected more by what happens in our state capitals than in Washington. Fraud fighters thus should be alert to creating opportunities in our own backyards.

The Coalition is using the summer to plan the states where there’s the  strongest need for new fraud laws — and a solid chance we can get bills enacted into law.

The Coalition’s government affairs committee meets this week to discuss the best hotspot states. Later this month, I’ll be on a conference call with state IASIU chapters. We’ll discuss the grassroots role that fraud fighters can play in writing their legislators in key target states next year.

The best way to convince insurers to make anti-fraud bills a priority in a given state is to make a business case why statehouse efforts are in everyone’s best interests.

Let me know if you think your state is a prime candidate for strong fraud bills in 2017. Partnerships among fraud fighters and other allies give us the best chance of success.

Together, we can make a difference.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Limiting Medicare billing may weed out cheaters

What to make of the federal government extending its moratorium on allowing new medical providers to bill Medicare and Medicaid in six states?

Does CMS still need to get a handle on pre-screening providers before allowing them to bill?

Or is fraud is so rampant in those areas that CMS must weed out existing bad actors before allowing new providers to enter?

Probably both.

Shutting down enrollment is a drastic move that can hurt honest providers. It also can limit patient access to needed care. But it’s a necessary step for the federal government to  effectively manage fraud in its programs.

The areas affected by the extension include home-healthcare and medical transport — two that are rife with fraud.

Congress gave CMS the power to shut down enrollments a few years ago, but CMS hesitated at first. Nudged by Congress, CMS started restricting enrollments in limited areas where fraud was most out of control.

The enrollments seem to be a qualified success, but it will take a few years to fully know if provider fraud has started moving downward.

In the meantime, CMS is taking a smart approach to using its power to restrict enrollments. Moratoria are targeted. The latest extensions, for example, impose home-health enrollment limits in Florida on just three of the worst counties. Plus, CMS now allows exceptions to the moratoria if providers pass heightened screening.

Taking action before crooked providers can bill is the best answer to the old “pay-and-chase” model. It should also deter many would-be cheaters, especially organized fraud rings looking to soak federal programs.

Doc makes fortune from worthless mental-illness drugs

Mental illness made Dr. Fernando Mendez-Villamil rich and taxpayers that much poorer.

The Miami psychiatrist spooned out epidemic levels of antipsychotic drugs to seniors in Medicare and lower-income people in Medicaid.

Mendez-Villamil became a national icon of overprescribing. He peddled nearly 97,000 scripts for powerful anti-psychotic drugs to Medicaid patients between 2007 and 2009. That was more than any doctor for mental-health meds in Florida.

Years of plying people with unneeded drugs finally landed Mendez-Villamil in prison. He was one more swindler in a national epidemic of painkillers and other opioids that doctors and pharmacies are handing to addicts. Many overdose or die.

Insurance money pays for billions of dollars worth of the prescriptions. Insurance fraud thus is a major financier of opioid addiction in America today.

A U.S. Senate probe singled out Mendez-Villamil for profligate insurance over-billing. He was bounced from Medicaid in 2010 “without cause.” That was a fast-track sanction. It spoke to Medicaid’s concern about his peddling so many lower-income people with potent drugs they didn’t need.

Mendez-Villamil next soaked Medicare, doling out another 47,000 taxpayer-funded scripts to seniors in just two years. His busy practice justified the pills, he asserted to regulators with little success. Fed up, Florida’s medical board reprimanded and fined him.

Along the way, Mendez-Villamil amped up his scamming. He took bribes and kickbacks to doll out bogus diagnoses of crippling psychiatric illness so thousands of people could falsely qualify for Social Security disability, Medicare and Medicaid. Fake mental illness diagnoses also falsely exempted many people from testing to become U.S. citizens.

Anti-psychotic excess

Medicare, Medicaid and other federal programs lost more than $60 million in false and inflated claims.

Mendez-Villamil owned a $1-million mansion in Coral Gables. The place brimmed with expensive art — the feds impounded 221 paintings, prints, sculptures and other artworks when they raided his home.

He was handed more than 12 years in federal prison and must repay at least $50 million that he stole from taxpayers.

The conviction came seven lingering years after his prescribing habits came to the attention of the U.S. Senate. Some observers believe prosecutors and regulators took far too long to shut down Mendez-Villamil for good.

“I know what I did was wrong, I was dishonest,” Mendez-Villamil admitted to the federal court before sentencing. “That’s not the way I was raised. … I apologize for my behavior. I feel guilty. I’m sorry for the damage I have done.”

A strong rebuke came from the U.S. Senate, which singled out Mendez-Villamil for dangerous excess in hawking unneeded pills at taxpayer expense.

U.S. Sen. Charles Grassley (R-Iowa) led the headline-getting Senate probe in 2009.

“When I started looking at top prescribers a few years ago, there was a frustration that state and federal authorities were slow to look at the problem,” Grassley told ProPublica after Mendez-Villamil’s conviction in July 2016. “That has to change. Patients are served badly by doctors who commit fraud.”

Insurance fraud continues to finance opiod epidemic


First came Prince, who died from an overdose of the painkiller fentanyl in his Minnesota home.

Next came singer Chaka Khan. She beat the reaper by entering into rehab this month, along with her sister.

The Grammy winner admitted fentanyl is her escape drug of choice. Chaka wisely gave up her summer concert appearances to focus on getting clean.

“The battle of addiction is a serious and long process, which is why I chose to address my use of prescription medications — which came about as a result of the knee surgery I had a few years ago,” she said.

Fentanyl is one of latest prescription painkillers to grab headlines. It’s used for severe pain, and is approved for longterm treatment. The stuff also is up to 100 times stronger than morphine, and 50 times stronger than heroin.

Fentanyl quickly shoots into the bloodstream. Dopamine then elevates, stoking the brain’s reward areas. The sweet euphoria grows into dependence, then addiction.

States like New Jersey and Mississippi are reporting spikes in fentanyl overdose deaths.

Insurance fraud is the largely untold story. It’s helping finance America’s epidemic of opioid addiction — billions of stolen insurance dollars worth.

Some fentanyl addicts reportedly are scamming health insurers to score prescriptions that feed the need. Same with other painkillers such as hydrocodone, or anti-anxiety meds and muscle relaxants.

Insurance scams may or may not have funded Prince’s or Chaka’s highs. Yet scams still are part of the bigger opioid picture, so we should be very concerned.

Insurers are stepping up investigations, plus education of doctors and patients to head off addiction. Law enforcement is going after shady pain clinics and pharmacies that dole out insurer-paid scripts.

Still, we risk getting exhausted by it all. We’re subject to steady parades of news stories about people dying from insurance-paid overdoses. Plus welcome busts of cold-blooded pain docs. They’re keeping addicts fed with pills — are we getting fed up?

Sadly, it may take a celeb’s drug death or rehab to keep headlines fresh and the public concerned. Let’s stay concerned, whether it’s a Grammy winner or small-town factory worker just trying to get clean.

Scammers make desperate excuses to escape insurance-fraud busts

FOM_July16Not smart enough to lie about his injured ankle. That was the Hail Mary defense Todd Romero tossed up, trying to steal workers-compensation money for a supposedly injured ankle.

Insurance fraudsters like Romero often doll out brainless excuses when trying to vindicate their criminal behavior to investigators, judges or curious onlookers.

Errant birds, blood-sucking insects, multiple-personality disorder and too dumb. These are just some of the daffy defenses fraudsters peddle when cornered and trying — with a straight face — to explain unexplainable insurance cons that lurched out of control.

Investigators quickly see through paper-thin excuses. Claim denied, scam busted.

Take Romero. The Louisiana offshore oil worker lied that he hurt his left ankle while stepping onto a well platform from a crew boat in the Black Bayou. He started hauling in workers-compensation money for his injury.

Romero’s doctor told him to wear an orthopedic boot. Romero kept trying to find docs who’d give him a more-serious diagnosis — bigger injury equals bigger insurance money.

Yet video caught Romero pushing his truck, and walking normally without the boot. His employer denied his claim and accused him of fraud.

Romero lacked “mental acuity” to commit fraud, he desperately contended in court when confronted with the footage. After all, Romero was age 22 before he graduated from high school, he said. In other words, he wasn’t smart enough to be crooked.

Yet Romero earned a professional license and hydraulic crane operator card, and was certified as a first-aid responder. Claim denied in a civil suit.

Burglar and victim?

Then there’s the strange case of Elvis hobbyist Herbert Stewart. Thieves ransacked the Bethlehem Township, Pa. man’s home, he told his insurer. Nearly $7,000 of Elvis records, pictures and other memorabilia were lifted.

Stewart hid the stuff in his closet the whole time. For some reason he never thought insurance investigators actually would look for the stuff. They quickly found his Elvis stash, leaving Stewart to explain away his false claim in court.

He has multiple-personality disorder, Stewart told the judge. One personality was the burglar, and the other was the victim. Stewart’s medicines weren’t working, thus freeing his thief personality to rob his insurer. Stewart received six months of probation.

“Stop listening to the other guy. Alright?” the judged ordered.

It’s unclear which personality is serving the sentence.

Tried to save woman?

“If there were a Mount Rushmore of bad luck I think Andy House’s face would be on it,” federal prosecutor Chris Tortorice said.Anthony Thomas’s arson plot was cooked, and his excuse was half-baked. The New Orleans landlord burned down his duplex apartment, receiving a little insurance money for lost rental income.

A buddy rented an apartment in a house. He wanted to make an inflated insurance claim for damaged furniture. So they decided to burn down the entire house.

The crony splattered gasoline throughout the home and set the fire. The blaze lurched out of control, leaving Thomas trapped inside.

He barely escaped. He had serious burns and spent 60 days in the hospital’s burn unit. Investigators were curious how Thomas and the house were burned at precisely the same time.

Um, well, Thomas tried to save a woman trapped in a burning car near the apartment, he said. No go, the court retorted. Thomas has permanent burn scars, and no insurance money. He’ll have 17 years in federal prison to rethink his excuses.

“He did not gain anything from it,” his perplexed attorney John Hall Thomas said. “It’s difficult to understand why he did this.”

Veered into marsh

Blame an errant pelican and mosquito hoards, Andy House told insurance investigators probing why his $1-million Bugatti Veyron veered into a salty East Texas marsh to its doom.

Only 300 Veyrons were made. They were geared to reach 250 mph. House over-insured the car for $2.2 million and stood to make a hefty profit if his insurer paid the damage claim.

So House roared down a straightaway and calmly veered into the murky goo. He left the motor running, pulling salt water into the engine — effectively flooding and totaling the car.

A low-flying pelican suddenly swooped in front of the Veyron, House told his insurer. He jerked the car to avoid the bird, accidentally barreling into the swamp. House said he left the engine running because he was too busy swatting mosquitos in the boggy goo.

Yet in a fit of incredibly unlucky timing, a car enthusiast saw the Bugatti jetting down the road. Awed, he whipped out his cellphone to capture the rare moment. He recorded House zooming down the road and smoothly ploughing into the lagoon. No pelicans in sight, no sharp veering.

The video became an online sensation. Car lovers winced over the Bugatti’s demise. It also was one of the most-expensive crashes of a single car in history.

Investigators quickly discovered the video during an online search.

Birds and bugs didn’t wash with the court. House was left with a sodden $1-million wreck, a year in federal prison, and must repay the $600,000 insurance settlement. He also has a permanent place in the notorious Insurance Fraud Hall of Shame.

“If there were a Mount Rushmore of bad luck I think Andy House’s face would be on it,” federal prosecutor Chris Tortorice said.

Adverse decision in Kentucky could embolden crash rings


A Kentucky lower court has thrown a wrench in the campaign to combat the growing scams involving PIP crashes in the Bluegrass State. The court agreed with two claimants in an auto crash. They’re suspected of fraud. Insurers have no right to compel them to attend an examination under oath (EUO), the lower court ruled.

The Coalition and NICB filed an amicus brief this week asking the Kentucky Supreme Court to overturn the decision and restore insurer rights to use EUOs.

EUOs are a powerful weapon to get at the truth. When summoned, many fraudsters don’t bother showing up —especially lower-level ring members. They feel the few dollars they’re making don’t offset the potential of getting caught.

EUOs are a deterrent as well. Knowing there’s a chance you might have to give details of a claim under oath helps keep people honest.

Take the EUO away, and more fraud rings likely will escape detection and feel emboldened to commit more fraud.

The Kentucky claimants contend insurers use EUOs to harass and intimidate honest claimants. We’ve found no evidence to support this contention. We determined that insurers use EUOs very infrequently, and only when necessary to discover truth about a claim.

In fact, EUOs can be an important tool to validate legitimate claims.

Sometime later this year, the Kentucky supreme court will announce its decision. Here’s hoping they support uncovering the truth about potentially fraudulent auto claims.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.